1. Introduction
A feasibility study is an evaluation of a proposed project to determine whether and how it can be mined economically. Detailed feasibility studies extend the evaluation to determine the maximum profit or most secure profit to be obtained and provide a blue print for implementation. Three types of feasibility studies are described in the following paragraphs; however, the remainder of this chapter is mainly devoted to the preparation, execution, and appraisal of the Detailed Feasibility Study. The financial evaluations incorporated into feasibility studies are pursued separately in Chapter 7 - Mineral Economics.
Order-of-Magnitude
Order-of-Magnitude Feasibility Studies constitute an initial financial appraisal and are often carried out by a single individual. To be effective, this study should include an elementary mine plan. Order-of-Magnitude Studies may evaluate whether to initiate or proceed further with an exploration project that has an indicated mineral resource. When an underground entry (shaft or ramp) is required to complete an exploration program, this type of study is employed to determine the benefit to (and not interfere with) subsequent permanent entries. Order-of-Magnitude Studies are accurate to ± 40-50% and are usually obtained by copying mine layouts and factoring known costs and capacities of similar projects completed elsewhere.
Preliminary Feasibility
Preliminary Feasibility or “Pre-feasibility” Studies are the second order and are useful in the following cases.
• Due diligence work
• Determining whether to proceed with a detailed feasibility study
• A “reality check” on detailed estimates to pin point areas meriting further attention
Preliminary Studies are accurate to ± 25-30% and are typically obtained by factoring known unit costs and estimated gross dimensions or quantities once conceptual or preliminary engineering has been completed. Preliminary Studies are usually completed by a small group of multi-disciplined technical people.
Detailed Feasibility
Detailed Feasibility Studies are normally the highest order and most important because they are the litmus test for proceeding with a project. Typically, Detailed Studies are the basis for capital appropriation and provide the budget figures for the project. They may be completed with a financial accuracy of ±10% provided that a significant portion of the formal engineering is completed. In some cases, Detailed Studies are completed to an accuracy of ±15% with quantities derived from general arrangement drawings only. When the engineering is later sufficiently advanced, a second estimate is made to an accuracy of ±10% to provide confirmation and firm budget numbers.
2. Rules of Thumb
Cost
• The cost of a detailed feasibility study will be in a range from ½% to 1½% of the total estimated project cost. Source: Frohling and Lewis
• The cost of a detailed or “bankable” feasibility study is typically in the range of 2% to 5% of the project, if the costs of additional (in-fill) drilling, assaying, metallurgical testing, geotechnical investigations, environmental scrutiny, etc. are added to the direct and indirect costs of the study itself. Source: R. S. Frew
Time
• The definitive feasibility study for a small, simple mining project may be completed in as little as 6-8 weeks. For a medium-sized venture it may take 3-4 months, and a large mining project will take 6-9 months. A world-scale mining project may require more than one year. Source: Bob Rappolt and Mike Gray
Accuracy
• ±15% accuracy of capital costs in a detailed feasibility study may be obtained with 15% of the formal engineering completed; ±10% accuracy with 50% completed and ±5% accuracy may be obtained only after formal engineering is complete. Source: Frohling, Lewis and others
Production Rate
• The production rate (scale of operations) proposed in a feasibility study should be approximately equal to that given by applying Taylor’s Law (refer to Section 6.6)
3. Tricks of the Trade
• Due diligent appraisal of a Feasibility Study should not neglect to consider whether the future of those individuals who sanctioned its approval is enhanced by a project go ahead, especially when excessive optimism is expressed. Source: Dennis Arrouet
• The pre-production capital cost should not include sunk costs already paid or committed, whether or not the project proceeds. Source: Roland Parks
• A conservative estimate for the capital cost can make heroes of the mine builders while one that is under-estimated can lead to unforeseen problems when ill advised short-cuts are taken to overcome a budget deficiency. Source: Jim Ashcroft
• The capital cost estimate of a detailed feasibility study should normally consider all new plant and equipment sized and built to provide optimum extraction and recovery. In this manner, a benchmark reference is provided. Opportunities to provide particular items of used plant and equipment may be compared to the bench mark and included as a side study. When feasibility is dependent upon the incorporation of second hand components to meet a financial hurdle, certification should be provided that the components will still be available at the time of building. Source: Jack de la Vergne
• Capitalized interest during construction is often left out or underestimated in the capital cost estimate. It must be included, as it may be a large number. Source: Ronald J. Vance
• The rate of return on investment predicted in a feasibility study may have been distorted by the application of accumulated debt to lower the rate of taxation. Source: L.D. Smith
• The cash flow (and hence the rate of return on investment) predicted in a feasibility study will be altered favorably if leasing instead of purchasing the equipment fleet is contemplated. (This procedure is an example of employing "hidden" leverage.) Source: Jack de la Vergne
• A mine in the arctic is required to store the concentrate during the long winter. This is a major detriment to the cash flow and the rate of return on investment, unless the concentrate is sold forward to the smelter before shipment. Source: Hank Giegerich
• A “straight-line” financial analysis in constant dollars (escalates neither revenue nor costs and all capital is depreciated on a straight-line basis for the life of the project with no salvage value or closure cost) is a reliable economic appraisal, particularly in times of high inflation. Source: George Beals
• A “bare bones” financial analysis (current dollars, no inflation, no interest on debt, and no tax reduction) provides a base case for project evaluation (and a means to better compare alternate investment opportunities). If a project shows itself well under these “bare bones” circumstances, it should show itself well under any real circumstance. Source: L.D. Smith
• Even a “straight line” or “bare bones” financial appraisal may be distorted if a long preproduction schedule is significantly underestimated. It often happens that the schedule does not take proper account of the long period between production initiation and the time that the mine eventually reaches full production capacity with grade control measures fully developed and
implemented. Source: Jack de la Vergne
• If the estimated mining cost per pound of metal is at or below that of low-cost producers, the accuracy of forward projection of metal prices becomes relatively less important. Source: Roland Parks
Mines are price takers, not price setters - and metal markets are not predictable. The process of financial optimization is traditionally directed towards achieving maximum return on investment, based on presumed metal prices. This measure is not foolproof. Perhaps a better approach is to direct first efforts towards producing the metal at a lower cost than most other mines, thereby reducing the risk for all the stakeholders. This consideration may involve raising the cut-off grade and selective extraction. Sources: Frank Kaeschager, Warren Buffet, and others
4. Order-of-Magnitude Feasibility Estimate
The Order-of-Magnitude Study first requires an estimate of the value of ore in the ground. A geological report provides the necessary information on the grade and quantity of ore that has been identified. Current metal prices (normally quoted in US dollars) may be applied to these values to determine a gross value to which a factor must be applied to obtain the net value of the ore. Only for the purpose of determining this factor, dilution from mining may be assumed at 15%. (In practice, dilution may vary widely.) Likewise, mill recoveries can be assumed at 90% for gold; 85% for lead, copper, or nickel; 80% for silver; and 75% for zinc. (In practice, mill recoveries may vary from these norms). Smelter and/or refinery returns can be estimated at 95% for doré (gold and silver bullion) and for separated concentrates: 85% for contained gold, 75% for contained silver, 90% for copper, 85% for lead or nickel, and 75% for zinc. These assumptions lead to the overall reduction factors (rounded off) shown in Table 6-1.
Table 6-1 Metal Reduction Factors
For example, if a mineral resource contains an assayed grade of 8% copper (and no other minerals are present), the net value of one short ton at an assumed market price of US$1.00 /Lb. is simply calculated:
2,000 x 0.08 x $1 x 0.60 = US$96/ton
For a polymetallic ore body, the easiest way is to convert the values of the minor constituents to equivalent value of the major and add it to that value (in US dollars). For example, if there are minor quantities of gold and silver associated with copper, an equivalent copper grade is calculated and the estimating procedure is then the same as if it were copper alone. If the value per ton thus calculated is more than twice the estimated operating costs (mine, mill, and administration costs), then it may be profitable to build a mine.
Operating costs for hard rock mines may vary between US$5 and US$100/ton depending mainly on the scale of operations and the mining method employed. A quick estimate of the applicable operating costs may be calculated by obtaining actual costs from the published annual reports of mining companies with a similar ore body.
The operating cost procedure may also be employed as a diagnostic tool to indicate the presence of a “fatal flaw” (real blunder) when scrutinizing a more detailed feasibility report prepared by another party. Some mining institutions that perform mineral economic studies on a routine basis have developed even simpler routines to obtain “quick and dirty” answers. A few others, less experienced, have made the error of using existing operations as a benchmark to determine viability. Erroneous conclusions may result from comparing ore grades of a proposed mine with those now profitably mined by a long-time producer, the capital cost of which has long been retired (amortized). It should be emphasized that this (order-of- magnitude) evaluation procedure concerns only grades and recovery. It does not provide assessment of whether sufficient reserves exist to be economical.
5. Preliminary Feasibility Study
The Preliminary Study is most often completed in anticipation of a subsequent detailed feasibility study. A Preliminary Feasibility Study is used to determine whether the major expenditure required for a comprehensive appraisal is warranted. Although it is carried out in the same manner as a Detailed Feasibility Study, the mine planning and depth of analysis are cursory by comparison. A Preliminary Feasibility Study is often completed in a few weeks; however, in some cases it represents a significant effort that may take two to three months.
The degree of scrutiny provided by a “due diligence” assessment is normally limited to the level of accuracy of a Preliminary Feasibility Study because of time constraints. One typical result is a recommendation to proceed with a detailed feasibility after ore reserves are better defined. A Preliminary Feasibility Study culminates in the issue of a report that typically includes the following sections.
• Introduction and scope of work
• Summary and Conclusions
• Location and description of the project
• Map with inset and site plan
• Regional and local geology
• Description of mineralization
• Ore resource estimate
• Mine longitudinal drawing
• Typical mine sections and level plans
• Mining method(s) and sequence of extraction
• Ore transport
• Process plant
• Mill flow sheet
• Mine infrastructure and utilities
• Pre-production construction schedule
• Production schedule
• Capital cost estimate
• Operating cost estimate
• Preliminary financial evaluation
6. Detailed Feasibility Study
The Detailed Feasibility Study is the most important and often termed the Final Feasibility Study. The main goal is to prove (or disprove) the economic and practical viability of a proposed mining project. The Detailed Feasibility Study is the principal document required to secure funding and it provides a basis for construction planning and cost control.
“The purpose of a detailed feasibility study is to clearly define a project and confirm (or deny) its economic viability. Even when a mine project is to be financed internally (i.e. without a project loan) by a mining company, a formal feasibility study should be undertaken, if for no other reason than to force the stakeholders to identify and think through all the problems involved. The feasibility study should confirm that the project would be completed to meet technical specifications and environmental stipulations at the estimated cost. The study should include an economic projection that forecasts production, operating costs, metal flow, and cash flow generated for the life of the project, as well as annual coverage for repayment of project loans (if applicable). A well-recognized and independent engineering firm should prepare the study. If, instead, it is completed in-house, the study should at least be checked independently and verified by comparison with similar projects, recently completed.”
G.R. Castle, Project Financing Guidelines for the Commercial Banker
Economic Projection
In addition to previously mentioned inclusions, the economic projection will not be complete unless it accounts for the following components.
• Applicable on-going capital costs
• Working capital requirements.
• Insurance.
• Royalties.
• Depreciation/amortization.
• Depletion.
• Investment tax credits.
• Processing allowance.
• Forward sales.
• Income taxes payable (federal, provincial/state and municipal).
• Corporate taxes.
• Interest charges.
• Freight.
• Smelting and refining charges.
• Mine closure.
• Reclamation costs/bonds.
• Risk and variance (sensitivity) analyses.
• Exchange rates, currency contracts, etc.
Currency exchange rates, currency contracts, etc. (foreign projects).
Practical Projection
The practical projection provides judgment on the following project components.
• Merit of the mine plan
• Method of processing ore
• Economic projection
• Permitting
• Stockpiling
• Marketing
• Management qualifications
• Labor pool
• Job training
• Recreation
• Social programs
• Employee housing
• Transportation
• Impact on adjacent communities
• Roads
• Water ways
• Ground water
• Wildlife management (in some cases)
• Archeological issues (in some cases)
• Aboriginal rights (in some cases)
Final Report
Preparation of a detailed feasibility study culminates in a comprehensive report that may comprise a number of volumes.
• Volume 1 Summary Report
• Volume 2 Geology and Ore Reserves
• Volume 3 Mine Planning
• Volume 4 Mine Plant
• Volume 5 Mineral Processing
• Volume 6 Consultants’ Reports
• Volume 7 Side Studies
• Volume 8 Quotations and Proposals
• Volume 9 Cost Estimates
Major Aspects
The major aspects of a Feasibility Study are discussed in the following paragraphs.
• Feasibility Study Preparation
• Determination of Production Capacity
• Risk Analysis
• Preparation of Side Studies
Feasibility Study Preparation
Following are recommendations for preparing a detailed feasibility study (Source: Jim Redpath and others).
• Do appoint one individual to be responsible for the feasibility study preparation (not a committee).
• Do provide this individual authority to match the responsibility.
• Do not burden the individual with additional assignments or responsibilities.
• Do appoint a deputy or second-in-command who can assume responsibilities if and when necessary.
• Do not skimp on conceptual engineering efforts at the outset of the study. This is the stage where true cost savings can be affected and fatal flaws avoided.
• Do consider alternatives and be receptive to innovation.
• Do not study alternatives to death or make the project viability subject to possible failure of prototype systems, equipment, or process.
• Do not invent a new format for the presentation of the study.
• Do use a tried and true structure that others can readily follow and comprehend. If possible, obtain a previous study for a similar project to use as a model.
• Do examine the project for fast-track potential. Detailed engineering performed concurrently with construction can shorten the overall schedule.
• Do not plan on temporary facilities if the permanent facilities (such as a headframe or hoist) can be made available on time.
• Do investigate the opportunities to place firm orders for major items of long delivery time before the green light is given. Such orders typically have a cancellation clause with a modest penalty in case the project fails to proceed.
• Do anticipate a learning curve at the start of mine development and plan for lower performance at start-up of production.
• Do add a contingency to both costs and schedule.
• Do calculate the contingency by determining the causes, potential consequences, and the chances for each to materialize.
• Do not be satisfied with the capital expense (capex) estimates until you are certain that no item of significant cost has been omitted or forgotten (bonds, taxes, duties, insurance, etc.).
• Do be suspicious of the operating expense (opex) estimates if they are significantly different from those actually experienced at similar operations elsewhere, measured on the same basis.
• Do not be satisfied with a project schedule until the chances of shortening the schedule are equal to the chances of finishing late.
• Do plan ahead, assuming acceptance and approval of the feasibility study. Remember that once the green light is given, the clock starts ticking.
Determination of Production Capacity
One of the important functions of a feasibility study is the determination of a scale of operations to maximize return on investment. In the first instance, production capacity may be determined by applying one or more rule of thumb formulas. One of these, Taylor’s Law, has proven surprisingly accurate for both open pit and underground application. It is used in preliminary evaluations and as a check on rates determined by rational analysis. Taylor’s Law expresses the desired capacity as a function of ore reserve quantity.
Taylor’s Law (Taylor, H.K. Rates of Working of Mines - A Simple Rule of Thumb, IMM Transactions, Oct, 1986)
The optimum extraction rate = 5 × (expected reserves)3/4/(days per year)
In which “Expected reserves” are generally interpreted to mean proven + probable reserves.
Example
Facts:
1. Expected reserves = 3,500,000 short tons
2. Mine five days per week = 250 days/year
3. Mill seven days per week = 350 days/year
Solution:
1. Mining rate = 1,618 short tpd
2. Milling rate = 1,156 short tpd
A second rule of thumb formula that has more recently been reported involves regression analysis. The formula is based on actual production rates at existing mines. Since the database does not include those mines that have closed prematurely, it gives a result on the low side even if a significant portion of the possible reserves are considered in the determination of the predicted reserves.
Regression Analysis Formula (Mosher, et al)
The extraction rate = 200 (predicted reserves)½/(days per year)
A third rule of thumb that applies to steeply dipping ore bodies has recently become the subject of great interest. The rule appears in various forms, all of which have roots to one proposed by Herbert Hoover in 1909. His book, entitled “Principles of Mining,” stated that one mining level per year was a good guide for planning purposes. Over the years, as the level interval increased, so did the rule of thumb. At a time, when the typical level interval became 150 feet, Professor Rice of the University of Toronto proposed that 6 inches per day (approximately 150 vertical feet per year) was a good rule and this guideline was widely accepted for many years. This rule had a good basis when the requirement for on-going development and stoping schedules, etc. was taken into account.
More recently, studies completed in Australia (McCarthy and Tatman) proposed that there is a cap on the rate of vertical extraction, and that if the cap is exceeded, “mine failure” will occur within a few years. The Mining Journal issue of May 7, 1999 reported that 60m (200 feet) per year is the practical upper limit for smaller mines. However, it was observed that practice at mines of 2 Mt/y or more was only 30-35m/year. The article went on to explain that the mode of failure was collapse of production due to the inability to maintain the “pace of infrastructure development.” In this regard, it is interesting to note exceptions to the rule at two smaller mines. LKAB’s Indian ore body Sweden was successfully mined at a rate of nearly 90m per year and the Beliveau mine in Canada was mined to exhaustion at a sustained rate of 104 vertical meters per year.
In preparing a detailed feasibility study, a financial analyst will normally perform a rational analysis for the optimum economic rate of extraction. Results from a sensitivity study (refer to Chapter 7 – Mineral economics) are typically plotted to obtain a graph that defines the optimum economical rate of production. The graph plots a series of production rates against a calculated benefit that may be expressed in terms of either payback period, rate of return, or net present value (NPV). Of these, the rate of return is likely the truest parameter since the NPV is normally based upon an arbitrary discount rate and maximum payback, and occurs (theoretically) if the ore body is mined out overnight!
In most cases, the optimum economical extraction rate is the one employed in the detailed feasibility study. However, it sometimes happens that the scale of operations must be revised for reasons not concerning the project itself. The determination is referred to as sub-optimization and may occur for any one of the following reasons.
• Funds are not available or cannot be raised to build a mine at the optimum rate and so a smaller rate of production must be contemplated at the outset. (Numerous examples exist.)
• Mine production is significant enough to affect the global supply/demand balance for the primary metal produced and so a smaller rate of production must be assigned (e.g. Black Mountain lead mine in Africa).
• The reserves are so vast that it is not practical to mine at the rate that is theoretically calculated due to limitations on logistics and/or size of administration and management that would be required (e.g. PT Freeport Indonesia in New Guinea).
• The ore from two or more mines is to be treated at a central mill requiring consideration of mill capacity and optimum ore blend (e.g. Inco Thompson nickel mines in Canada).
• The mining operations are expected to eventually suffer a significant increase in the rate of taxation as a result of a forthcoming national election and so a greater rate of production is assigned (e.g. Santa Dominga gold mine in Chile)
• A financial sponsor that is a government authority may insist that the production rate be lowered from the economic optimum to minimize demographic impact and prolong local employment (e.g. Nanisivik zinc mine in the Arctic).
Risk Analysis
“When you cannot measure risk your knowledge is of a meager and unsatisfactory kind.”
Lord Kelvin
Risk in the context of a mining venture is an alteration of anticipated cash flow caused by an unforeseen circumstance or event. The elemental actuarial risk analysis formula is Risk = probability x magnitude. That is, if the probability of an untoward event (such as a prolonged power outage) is one chance in fifty and the cost of the event (if it occurs) is estimated to be $500,000 then the risk is $10,000. Unfortunately, this simple analysis is not sufficient for mine evaluation purposes. More sophisticated procedures are required.
Mining risk may be assigned to two categories.
• Direct (associated with the mining activity)
• Indirect (independent of the mining activity)
Direct risk has a recognized source in the uncertainty of estimates of grade, recovery, tonnage, operating costs, price of mineral product, etc. It is addressed in a detailed feasibility study by a sensitivity (variance) analysis (refer to Chapter 7 – Mineral Economics). Such an analysis demonstrates that a low-grade ore body is sensitive to operating costs and commodity price. In other cases, it may reveal a sensitivity that is not so obvious. It is important to note that this economical procedure does not recognize certain risks inherent to mining activity, such as pit slope failure, stope failure, run of muck, or a shaft incident. Neither does it normally account for a possible future increase in the rate of taxation nor future enactment of other punitive legislation.
Indirect risk may be sub-divided into two categories. The first category includes risk that may be mitigated by insurance. For example:
• Underwriter insurance provides safe design criteria and protects against fire,
• Marine insurance protects against loss at sea,
• Bonding protects against contractor default.
The second category of external risk concerns those events against which there is often no remedy available. Usually, these are categorized as “force majeure.” They include risk associated with war, insurrection, civil disruption, riots, sabotage, earthquakes, work-to-rule (slowdown), strikes, lockouts, etc. Normally, there is no protection for this sort of risk; however, there are exceptions.
• Insurance obtained from the home country federal foreign development agency or the Multilateral Investment Guarantee Agency of the World Bank protects against political risk.
• A major mining company recently obtained a “no strike/no lockout” agreement before committing funds to a large expansion project at one of its mine sites.
In the financial analysis, risk is considered in two important places. Risk is a component of the discount rate used to determine NPV and is a component of the hurdle rate (threshold value) established for the required minimum rate of return (DCF-ROI). Scrutiny of the economical evaluation process reveals that the risk factor actually employed (expressed as a percentage in both cases) does not have a rational or statistical origin that encompasses all the applicable risks. In fact, it is really a notional or judgmental figure.
As a consequence of imprecise risk analysis (and for other reasons), many mining companies and financial lending institutions now believe that competitive cost analysis is the most reliable tool for economic appraisal. The basic premise of this analysis is that only by being a low-cost producer can a mining venture combat low metal price cycles and other unpredictable risks. If a mine can produce its product at less cost than other mines, the mine can weather the storms and remain in business to ultimately reap the benefits of a great increase in demand resulting from cyclic recovery and the interim demise of high-cost operations elsewhere. The procedure requires a data bank of applicable mining statistics that have been assimilated on a global basis.
Preparation of Side Studies
One important technique employed in preparing a detailed feasibility study is the use of side studies as a means of settling important issues without interrupting the progress of the main study. Typically, a small team of technical people is assigned the responsibility of developing a side study and issuing a report containing recommendations.
Following is a list of items that frequently become the subject of side studies.
• Purchase versus rental of equipment fleet.
• Company forces versus contracting outside.
• Selective versus bulk mining methods.
• Block cave versus blasthole mining.
• Gyratory versus jaw crusher.
• Apron versus vibratory feeder.
• Conveyor versus rail transport.
• Rail versus truck haulage.
• Koepe versus drum hoist.
• Concrete versus steel headframe.
• Fully Autogenous Grinding (FAG) versus Semi-Autogenous Grinding (SAG) mill.
• Carbon-in-leach (CIL) versus carbon-inpulp (CIP) process.
• Slurry line versus trucking concentrate.
The conclusion and recommendation of the side study is based on an economic and practical appraisal of alternatives. The appraisal is normally completed by conducting separate exercises that may include the following activities.
• Literature search to find relevant texts, articles, and technical papers.
• Solicitation of opinion from experts in the field.
• Telephone conversations with operators at existing installations.
• Site visit to one or more relevant mining operations.
• Case studies that assemble and assess pertinent data from other mines.
• Review of quotations or proposals.
• Interviews with technical representatives of manufacturers, contractors, etc.
The basic procedure is first to develop a list of significant economic and practical attributes and then compare them. Subsequently, the advantages and disadvantages are identified. Each attribute is then assessed as to project relevance and summarized to reach a conclusion.
In one technique, each attribute is ranked by (1) inherent significance and (2) relevant application to the project. Typically, estimates for each of these two values are scaled to a number between one and ten. The results are summarized on a simple spreadsheet that multiplies the two estimated values for each attribute (Keynesian theory). A separate column contains the products of the multiplication for each alternative, which are then added to obtain a score. The alternative with the higher score wins.
While this technique is not always applicable, it is one that provides an easily understood rational evaluation. In addition, it simplifies changes made after review and facilitates diligent scrutiny by others.
Example – Advantages and Disadvantages
Where it is established that shaft hoisting is required for a proposed mine, a determination is often required whether to employ a drum hoist or a Koepe (friction) hoist. The following example contains a generic list of attributes for a typical side study assembled in a format that separates advantages and disadvantages.
• Advantages of the Koepe Hoist
- A new Koepe hoist is less expensive to purchase than a new drum hoist for the same service.
- The delivery time for a new Koepe hoist may be less than a new drum hoist for the same service.
- More competition exists in the manufacture of friction hoists.
- A multi-rope Koepe hoist has a capacity to lift a heavier payload than a single-rope drum hoist.
- The peak power consumption is less, requiring a drive of smaller nameplate horsepower for equivalent service.
- The energy consumption and peak power recorded by a demand meter are virtually the same for a Koepe or drum hoist for equivalent service, but the effects on a sensitive power grid are less for a Koepe hoist.
- The Koepe hoist does not regenerate significant power into the grid, which may be of consequence when the power is supplied by on-site generators.
- The Koepe hoist does not require safety dogs for man carrying conveyances.
- The Koepe hoist is of smaller diameter than a drum hoist for the same service, hence easier to transport and erect for an underground blind shaft (winze).
- Rope life is usually much longer than for a drum hoist.
- A friction hoist can operate at higher speed than a drum hoist.
- A Koepe hoist does not have the problem of flying rope grease.
- A Koepe hoist may be readily converted to a single drum hoist with provision of a hawse hole and drum lagging.
• Disadvantages of the Koepe Hoist
- A balanced Koepe system is not satisfactory for hoisting from loading pockets at different horizons in the shaft. For this service, a skip/counterweight configuration is required.
- A Koepe hoist is generally not suited to shaft deepening.
- A Koepe hoist is not satisfactory for sinking deep shafts.
- The braking effort is restricted by the requirement to maintain friction between the head ropes and drum.
- If the shaft bottom is flooded, the Koepe hoist is automatically slowed to creep speed.
- A used Koepe hoist is difficult to find to fit a particular application.
- Rope replacement is accomplished with great effort and may require a mid-shaft rope changing station if the shaft is deep.
• Advantages of the Drum Hoist
- The drum hoist requires less downtime for routine maintenance.
- The maintenance regime for a drum hoist is less sophisticated.
- The drum hoist can continue to operate normally when the shaft bottom is flooded.
- Less shaft depth is required beneath the loading pocket.
- Less over-wind and under-wind protection is required.
- Because it has no tail ropes, the drum hoist system is better suited to slinging loads beneath a conveyance.
- The drum hoist is less subject to nuisance trip-outs because it is equipped with fewer control and safety devices.
- Less investment in spare rope inventory is required of a drum hoist.
- If one conveyance is jammed in the shaft, emergency access may be had with the other conveyance of a double drum hoist.
- If a shaft wreck occurs, it is typically less catastrophic with a drum hoist than with a friction hoist.
- The drum hoist has a more liquid market and higher salvage value when it needs to be replaced or is no longer required.
• Disadvantages of the Drum Hoist
- The drum hoist generates power at the end of the wind, which goes back into the power grid. If the grid is provided by generated power, this can become a problem because generators are designed to produce and not receive power. This problem is more acute with multiple generators fighting to maintain synchronization. The problem is alleviated if an independent steady load is included in the generator grid (to act as a sink for power generated by the hoist).
- The spikes of the drum hoist cycle are also a problem for generators. They do not react well to rapid fluctuations in demand, particularly if the generators are not over-sized for the application.
- A drum hoist takes up more space than a friction hoist, for the same service.
- A drum hoist is more likely to have problems with rope whip, particularly when operating at high speeds.
- To change the rope diameter on a drum hoist requires a new drum sleeve or shell, while on a Koepe hoist, only the tread liners need be replaced.
- For application underground, the drum hoist may have to be specially manufactured with sectioned drums to fit travel-ways.